Monti Presents Economic Plan for Italy, While Students Protest

Italy’s new Prime Minister Mario Monti has presented his plan to resolve the country’s deep financial crisis, while students in Rome and elsewhere stage protests against the government’s imminent austerity measures and spending cuts.

Monti, an unelected technocrat and former European Union (EU) commissioner, has vowed to reduce debt, while seeking to maintain economic growth and social equity.

The future of the euro also depends on what Italy will do in the next few weeks, he told senators in Rome, ahead of a confidence vote on the new government scheduled for Thursday evening.

He informed senators he plans to change Italy’s pension system, which he believes has large disparities in treatment and unjustified privileges for certain sectors. He also vowed to crack down on tax evaders and enact changes to the taxation system, including a possible restoration of the main property tax, which former Prime Minister Silvio Berluconi had abolished.

If we fail, if we don't carry out the necessary reforms, we will also be subjected to much harsher conditions, said Monti, adding, We don't see the European obligations as imposed by external forces. It's not a case of them on one side and us on the other. We are Europe.

Overall, he promised to balance the budget by 2013 and slash the country’s massive debt--now totaling 1.9 trillion euros, or 120 percent of GDP--the second highest level in the Eurozone behind only Greece.

Monti, who succeeded Berlusconi last week, has formed a cabinet consisting primarily of business executives, lawyers, bankers and academics, rather than career politicians.

Key members of the new cabinet include Corrado Passera, chief executive of Italy’s biggest bank Intesa Sanpaolo group, who's now the chief of the new ministry of development, infrastructure and transport; Antonio Catricala, formerly the head of the anti-trust authority, who's now the cabinet under-secretary; Elsa Fornero, an economics professor, who's now the labor minister.

The absence of political personalities in the government will help rather than hinder a solid base of support for the government in parliament and in the political parties because it will remove one ground for disagreement, Monti has said.

Meanwhile, the proposed changes to Italy’s financial structure have already elicited waves of unrest among the populace. European media reports that Italian students have demonstrated in Rome, Milan and other cities to protest the new austerity budget.

In Rome, hundreds of students assembled outside Sapienza University and the main train station, apparently ahead of a planned march on the Senate.

Hundreds of students rioted in Milan and tried to enter Bocconi University, which is affiliated with Monti.

Bocconi is regarded as the training school for the nation’s banking elites. Students waved placards condemning what they call the “bankers’ government” and shouted “We don’t want the banks to rule.”

In Palermo, Sicily, demonstrators threw eggs and smoke bombs at a bank, while others hurled stones at policemen.

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